Milton Wray | Save the pharmacy sector
A frightening crisis is looming in the pharmacy trade, which could shortly result in a severe shortage of medications, as well as a financial fallout akin to that of the 1990s. And the Government appears completely oblivious to the gathering storm. In fact, the approaching crises are as a direct result of state action.
Instead of adapting a needs-based approach to the distribution of free drugs, Government has pursued a policy wherein highly subsidised and free medications are available to everyone. It is a policy that is having severe debilitating effects on the retail pharmacy sector. Thousands of retail pharmacy jobs are now dangling precariously on the line, as several pharmacy establishments have been crippled, and once thriving businesses wobble along, simply hoping for a change in fortunes.
The local distributors of medications, too, are being adversely affected. Several remain unpaid for supplies credited to retailers. As a result, several have been unable to adequately restock their warehouses from overseas suppliers, resulting in a current shortage of some critical medications.
The issues not only threaten the health sector; the financial sector, as well, could be in for a rude awakening. Between the distributors and retailers of pharmaceuticals, billions of dollars in debt stock is held at Jamaica's financial institutions. There is real and looming danger of serious default and abandonment.
While access to highly subsidised and free drugs is ideal, such a goal must be achieved through policies that are aligned with consideration for all stakeholders. In its bid to serve the public good, Government ought not to craft policies that have the effect of wiping out entire sectors. It requires only simple, common-sense thoughtfulness.
For example, if the State employed PATH as a vehicle for assessing need, free drugs could be provided only to those who truly cannot afford to pay. As it now stands, even the rich and those persons covered under private-sector health insurance are entitled to free drugs at the taxpayers' expense.
Through its agency, the National Health Fund (NHF), Government has established its own branch network of pharmacies throughout Jamaica to distribute drugs to rich and poor alike free of cost, directly undermining small businesses in the pharmacy trade. In fact, in some instances, these Drug Serv pharmacy outlets have been situated in proximity to already-established, privately owned retail pharmacies.
What is even more astonishing is the fact that these Drug Serv outlets no longer provide medications only to patients of public hospitals and clinics; they have begun to accept prescriptions from private doctors, too.
Additionally, the National Health Fund has cranked up an aggressive expansion of Government's free medication for-rich-and-poor Drug Serv outlets, busy establishing new dispensing at community health centres, hospitals and clinics - all while emptying privately run retail pharmacies of customers who can afford to pay.
These Drug Serv outlets were originally intended to distribute only a handful of items from the Vital, Essential and Necessary (VEN) list. However, the mandate has been abandoned, and Drug Serv is now dispensing even highly expensive brand-name drugs.
It is moot as to whether the legislation establishing these Drug Serv outlets is even constitutional. Profits are property. Everyone has a constitutional right to his property. Any law that has the effect of depriving one of his property could very well stand in breach of our constitutional measures.
Government ought not to use its dominant position to compete with, let alone directly undermine, private enterprise. If a fix to the free drugs-for-rich-and-poor initiative is not urgently conceptualised and quickly implemented, the ripple effects will reverberate throughout the entire economy.
Since the Bruce Golding administration introduced its regime of free health care for all and sundry, the measure had dealt a painful, crushing blow to several small businesses in the pharmacy trade. However, recent initiatives by the Holness administration are driving the final nail in the coffin. Under the Ministry of Health's pursuit of universal health care, due consideration has not been given to the possible adverse effects. The focus has been completely one-sided.
Take, for example, the recently initiated pilot project for the public-private partnership (PPP) between the Ministry of Health and privately owned pharmacies. It is an initiative wherein certain private pharmacies are chosen to distribute peppercorn-rate drugs on behalf of the Government. The pilot has been tested and completed and the PPP programme is set to be rolled out in full in short order.
The problem is that the programme will not be made available to all retail pharmacies across Jamaica. Hence, while the chosen ones are busy distributing medications to public health patients for a mere J$200 per prescription (not per item), the other pharmacies left off the programme will just have to make do.
To achieve its goal of free and subsidised drugs for all, rich and poor alike, the Jamaican State has implemented a number of models. One such is the Jamaica Drugs for the Elderly Programme (JADEP). Through this strand, the State supplies private pharmacies with certain select drugs to be distributed to the elderly at a price of J$40 per item.
From experience, several wealthy, semi-wealthy and otherwise persons of means have been taking full advantage of the J$40 medicines, in the process exhausting the supplies and often depriving those who are truly in need. It is another example of an idea that was not well thought out.
If the overall free health-care policy is re-engineered towards a needs-based approach, these simple shortcomings will be immediately eliminated.
Health Fund card
Another strand is the National Health Fund card. With this particular thread, persons with chronic illnesses enjoy subsidies on certain medications, once they are diagnosed by a doctor. This filament is akin to a state-sponsored and -operated health insurance scheme for drugs. Both the rich and the poor and even those already covered under private health insurance are entitled.
However, the NHF card follicle is the best of the airheaded lot. For while it unfairly takes from the poor taxpayer and gives to the rich, at least business establishments in the retail trade are paid in full by the National Health Fund.
As indicated in recent press reports, the NHF itself is in serious financial troubles. According to the reports, it is owed more than $4 billion by Government for drugs supplied to hospitals, clinics and, no doubt, Drug Serv outlets to be given away to the rich and the poor.
On a human level, the adverse effects on small business people from the free-drugs-for-rich-and-poor scheme have been nothing short of heart-rending. Business decisions had been made based on trends and projections. But those trends and projections have been turned on their head, as their customer base abandons their businesses for the Government's free-drugs-for-the-rich-and-poor scheme.
Business owners have literally broken down in tears as they watch their business crumble. Many worked unflinchingly for many years, building up their only source of livelihood and source of income for their employees. And like a thief, the State has stealthily crept up and yanked away what these enterprising individuals worked tirelessly to accomplish.
As they limp along, for many, it is mere sentimental attachment that keeps them from throwing in the towel completely. But they suffer in silence, fearful of victimisation and repercussions from the big bad State and its attendant agencies.
Most established their businesses on credit, and have continued to borrow more and more in a bid to save their ventures from ravages wrought by the effects of Government's free-drugs-for-all policy. Their financiers are hounding, for they are already in arrears.
Some have already given up, forced to permanently close their doors. Only the lucky few continue to do well, dependent on such factors as arms-length proximity to a Drug Serv outlet.
Families are being severely affected by these business closures, as jobs go up in smoke. Hundreds more job losses are around the corner, as one section of the economy's engine of growth is eviscerated.